When it comes to advertising on TikTok, many brands are concerned about “How much do TikTok ads cost?”. Knowing how this platform charges on every type of ad can help them to allocate their budget better and make smart investments. TikTok Ads budget is also an important part of your TikTok marketing strategy.
So this post will be all about how much it costs to advertise on TikTok and whether it is truly worthwhile. Without further ado, let’s get started now to gain some precious information!
Table of Contents
What is TikTok Ad?
TikTok ad is a solution designed exclusively for businesses to broaden their reach and drive conversions. TikTok ads will target viewers based on their demographics, interests, and behaviors. You can create your TikTok ads in different forms such as short-form videos, images, or hashtag challenges.
The ads are then shown to your audience as sponsored videos, ads in the For You feed, hashtag challenges, or promoted trends. TikTok also allows advertisers to track their performance and make adjustments to their campaigns in real-time.
It provides businesses with powerful, yet easy-to-use tools to promote their products to millions of global users. After creating a TikTok ad account, you can get access to targeting, ad creation, insight reports, and ad management tool.
TikTok enables you to select from various ad options with different targeting. Below is the breakdown of TikTok ad types.
How much do TikTok Ads cost?
With TikTok Ads, you can choose between a daily and lifetime budget which can be modified anytime throughout your ad campaign.
- Daily budget: The maximum amount you want to spend on your campaign or ad group per day. You need to pay at least $20 per day. For the campaign level, the daily must exceed fifty USD. For the ad group, the daily budget must exceed twenty dollars.
- Lifetime budget: The maximum amount you are willing to pay for your campaign or ad group during the entire period of running TikTok ad. The cost is calculated by multiplying $20 by the total number of days you run the ad.
TikTok’s CPM (cost per thousand views) and its CPC (cost per click) for advertising start at $0.50 and $0.02 respectively. Notably, you need to pay at least $500 for a whole campaign and no less than $50 for the daily budget.
Furthermore, according to the latest analytics from PiPiAds in 2022, TikTok’s average ad cost per 1,000 plays and the average ad cost per conversion or click for TikTok are estimated at $3.90 and $16 respectively.
However, keep in mind that there are 5 major factors that affect the cost of your TikTok ads, including ad objective, bidding method and amount, audiences, your industry, and ad formats.
Below is a detailed estimate of TikTok ad costs based on their formats:
In-Feed
In-Feed ads are TikTok’s standard ad format, which allows you to embed your video ads to auto-play in front of your target audiences. This type of TikTok ads, which can last from 5 to 60 seconds, is displayed on the For You page and take the form of organic TikTok videos. The cost per view for this ad style is varied depending on the ad settings; however, the average cost of in-feed ads is $10 per 1,000 impressions.
A little bit different from other TikTok ads types, we highly recommended In-Feed ads to all businesses, especially e-commerce brand. No matter the small or big budget, everyone can set up In-Feed Ads for their business.
Top View
Top-View ads, which have a maximum duration of 60 seconds, show first in the For You feed when users open TikTok.
Being TikTok’s most valuable ad format, Top-View ads seem to be a little bit expensive. The exact cost of your ad campaign will determine how much you ultimately need to pay. However, you should budget about $65,000 for 7.4 million impressions.
Brand Takeover
Brand takeovers are immersive full-screen ads that show up in the first few seconds after users start TikTok. Because TikTok only allows one brand to take over each day, running this type of ad is costly.
The starting price for brand takeovers is about $50,000 per day.
Branded Effect
These ads are customized 2D and 3D effects, stickers, and standard/ AR filters. This ad format is very powerful, eye-appealing, and perfect for raising brand awareness and driving engagement thanks to its interactive capability.
For 30 days, this ad format costs around $45,000.
Branded Hashtag
Advertisers can use branded hashtags to encourage TikTok users to make their own videos in response to the brand’s unique hashtag challenge.
With the exclusive benefits of gaining access to the performance of the branded hashtag campaign, this ad format costs around $150,000 in 6 days.
How to optimize your TikTok Ads?
Every penny matters, especially for businesses with a tight budget. When it comes to advertising, pouring out a lot of money on it doesn’t ensure your good ad performance. What you need is to know how to bid and allocate resources smartly, especially with TikTok – a platform with many features for business.
So here’re some bidding strategies that you can apply to optimize your TikTok Ads cost but still get good results.
- Bid Cap: By choosing Bid Cap, you can keep the average cost per result below the price ceiling you’ve set. The system will automatically optimize delivery based on the highest cost per result you enter.
- Cost Cap: This bidding strategy gives the system an average cost per result that it tries to achieve. As a result, the cost per result sometimes will fluctuate higher or lower than the bid amount.
- Lowest Cap: Instead of requiring a bid, the Lowest Cost uses the existing ad group budget to generate as many results as possible at the lowest cost per result. No matter how competitive the auction environment is, Lowest Cost is always able to stay within budget.
Bonus tips
- Choose Bid Cap or Cost Cap as your bid strategy if you prioritize controlling your daily cost per result.
- For Conversion Ad campaign with Conversion as your optimization goal, choose Lowest Cost as your bid strategy is the best to optimize the daily budget.
- If Bid Cap or Cost Cap is your bid strategy, you should set your bid as your target cost per acquisition (CPA).
- If you are running an App Install campaign and want to optimize it based on users taking specific actions in your app, use App Event Optimization (AEO). For AEO and set your bid as your target CPA.
Top 3 TikTok Ads examples to inspired your next campaign
Guess
Guess is an innovative clothing brand for women, men, and kids. To promote their Fall’18 Denim Fit Collection on TikTok, Guess used the hashtag challenge #InMyDenim to increase awareness and engagement.
During the 6-day campaign period, #InMyDenim realized over 5,550 user-generated videos, 10.5 million video views, 14.3% engagement rate, and over 12,000 additional followers for Guess’s Business Account on TikTok. The promotion resonated with consumers and considerably boosted brand affinity.
Garnier
Garnier is a haircare and skincare brand founded in France. It made a TikTok challenge with a 2D Branded Effect featuring a Hair Food shampoo bottle on the screen which users could employ as a transition, showing their hair and outfits before and after to highlight the benefits of Hair Food.
During the first month, the campaign recorded over 250 million video views. And there are 109,000+ videos created by over 48,000 TikTok users (of which 2,320 videos use the 2D branded effect).
Stella McCartney
TikTok users began posting videos with the tagline “Tell me it’s summer without telling me it’s summer” as the Northern Hemisphere’s climate warmed up. Stella McCartney took advantage of this trend to promote its 2021 summer collection.
The brand launched an in-feed ad campaign featuring clips of typical summer activities like drinking cold drinks, eating melting ice cream, and wearing sunglasses — all while wearing pieces from the summer collection in the background. In a short period of time, this ad campaign received more than 3 million views and 20,000 clicks.
Ready to grow your business with TikTok ads?
From a huge user base and high level of engagement to a unique discovery algorithm, and much more, TikTok gives brands a lot of opportunities to increase their exposure, and drive engagement and sales through various ad formats. Therefore, it is worth a try to experiment if TikTok Ads is the right way to go for your business.
If you need any help in launching a cost-effective TikTok ad campaign, feel free to contact our experts via live chat or try our NestAds app. NestAds is an advertising management software that helps you simplify your TikTok ad setup, reach out to the right audience and maximize conversion.
